Activity in IT202

ROBISO, CHRISTINE M.
TAN, CECILIA A.
2. Discuss Financial Accounting Cycle (hard copy 10 points)
The financial accounting cycle refers to a series of sequential steps or procedures performed to
accomplish accounting process. The steps in the cycle and their aims are the following:
Step 1: Identification of Events to be Recorded. Aim: To gather information about transactions or

events generally through the source documents.
Step 2: Transactions are Recorded in the Journal. Aim: To record the economic impact of transactions
on the firm in a journal, which is form that facilitates transfer to the accounts.
Step 3: Journal Entries are Posted to the Ledger. Aim: To transfer the information from the journal to
the Ledger for classification.
Step 4: Preparation of a Trial Balance. Aim: To provide a listing to verify the equality of debits and
credits in the ledger.
Step 5: Preparation of the worksheet including Adjusting Entries. Aim: To aid in the preparation of
financial statements.
Step 6: Preparation of the Financial Statements. Aim: To provide useful information to decision makers.
Step 7: Adjusting Journal Entries. Aim: To record the accruals. Expiration of deferrals, estimations and
other events from the worksheet.
Step 8: Closing Journal Entries are Journalized and Posted. Aim: To close temporary accounts and
transfer profit to owner’s equity.
Step 9: Preparation of a Post-Closing Trial Balance. Aim: To check the equality of debits and credits
after the closing entries.
Step 10: Reversing Journal Entries are Journalized and Posted. Aim: To simplify the recording of certain
regular transactions in the next accounting period.
3. Think of a service business that is going on (single proprietorship) then
a. Specify Name and nature of business (5 points) (hardcopy)
Business Name: Uy Law Office
Nature of Business: A Law firm established and owned by Atty. Jan Uy for his legal practice of his
profession and expertise.
b. Beginning balance (last accounting period) (10 points) (hardcopy)
UY LAW OFFICE
OPENING BALANCE
ACCOUNT TITLE DEBIT CREDIT
CASH 500
OFFICE SUPPLIES 2,000
ACCOUNTS RECEIVABLE 4,000
PROPERTY 50,000
PLANT AND EQUIPMENT 7,000
ACCOUNTS PAYABLE 2,750
LOAN 40,000
CAPITAL 6,000
RETAINED EARNINGS 14,750
TOTAL 63,500 63,500
c. At least 30 financial transactions (current accounting period) (hardcopy) (15 points)
During the Month of December 2019, Uy Law Office had the following transactions.
Dec. 1- Atty. Jan Uy invests P500,000 cash.
- Uy Law Office obtains a loan from Mars Bank amounting to P100,000. The loan bears 6% annual
interest payable every December 1.
- Uy Law Office pays P10,000 for the necessary permits and licenses for its operation.
- Uy Law Office pays P120,000 for the annual rent of the office space.
Dec. 2- Uy Law office renders a legal advice to Mercury Co. and billed for P135,000.
- Uy Law Office purchases supplies worth P5,000, on cash basis.

Dec. 3- Acquired P70,000 worth of equipment; paying 30% in cash, and a promissory note for the
balance.
Dec 8- Uy Law Office renders legal advice to Venus Co. for P37, 500 on cash basis.
- UY Law Office purchases a laptop for P36,000 cash. The laptop has an estimated useful life of 3
years, with no residual value.
Dec. 10- Performed services for Client A for P70,000 cash.
Dec. 11- Billed Client B for legal advice rendered, P100,000.
Dec. 15- Mercury Co. pays Uy Law Office.
Dec. 17- Atty. Uy withdraws P25,000 from the law office for his personal use.
Dec. 18- Purchased P30,000 worth of office supplies on account.
Dec. 20- Cygnus Catering bills Uy Law Office for P25,000 for services rendered for it’s holidays luncheon
for its clients and staffs.
Dec. 22- Received P75,000 cash from Client C for services to be performed on January 5, 2020.
- Atty. Uy withdrew P25,000 cash from the law office for personal use.
Dec. 22- Uy Law Office receives P35,000 cash in advance from Jupiter Co. for services to be rendered in
2020.
Dec. 23- Uy Law Office renders legal service to Vega Co. for P55,000, on account.
- Collected 60% of the balance from Client B’s December 11 transaction.
Dec. 27- Uy Law Office renders taxation advice to a client. UY Law office bills the client for P20,000.
-Paid P80,000 of the notes payable.
Dec. 31- Uy Law office pays P15,000 for the salary of its accounting and office staff.
- Uy Law Office also pays utilities of 8,000.

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ROBISO, CHRISTINE M.

2. Discuss Financial Accounting Cycle (hard copy 10 points)

Step 1: Identification of Events to be Recorded. Aim: To gather information about transactions or

3. Think of a service business that is going on (single proprietorship) then

a. Specify Name and nature of business (5 points) (hardcopy)

Business Name: Uy Law Office

ACCOUNT TITLE DEBIT CREDIT

OFFICE SUPPLIES 2,000

ACCOUNTS RECEIVABLE 4,000

PLANT AND EQUIPMENT 7,000

ACCOUNTS PAYABLE 2,750

RETAINED EARNINGS 14,750

TOTAL 63,500 63,500

c. At least 30 financial transactions (current accounting period) (hardcopy) (15 points)

Dec. 1- Atty. Jan Uy invests P500,000 cash.

- Uy Law Office purchases supplies worth P5,000, on cash basis.

Dec. 10- Performed services for Client A for P70,000 cash.

Dec. 11- Billed Client B for legal advice rendered, P100,000.

Dec. 15- Mercury Co. pays Uy Law Office.

Dec. 18- Purchased P30,000 worth of office supplies on account.

- Collected 60% of the balance from Client B’s December 11 transaction.

-Paid P80,000 of the notes payable.

- Uy Law Office also pays utilities of 8,000.

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